The DDIT(Exemp.), Ahmedabad V. Utthan Seva Sansthan, Ahmedabad

ITA 2208/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94457 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 28-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 30-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P B KEDIA
• Keywords: Charitable institution

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ ITA NO.2208/AHD/2013 / ASSTT. YEAR: 2010-2011 DY.DIRECTOR OF INCOME TAX (EXEMPTION) AHMEDABAD. VS UTTHAN SEVA SAMSTHAN 26, SURDHARA BUNGALOWS NR.T.V. TOWER, THALTEJ, AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI SOMOGYAN PAL, SR.DR ASSESSEE BY : SHRI P.B. KEDIA / DATE OF HEARING : 28/09/2015 / DATE OF PRONOUNCEMENT: 29/09/2015 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF THE LD.CIT(A) DATED 13.6.2013. THE REVENUE HAS TAKEN F OUR GROUNDS OF APPEAL. BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE I.E. WHETHER THE ASSESSEE CAN ACCUMULATE 15% OF THE INCOME DERIV ES FROM PROPERTY HELD UNDER THE TRUST UNDER SECTION 11(1)(A) OF THE INCOME TAX ACT OR ITS ACCUMULATION CAN ONLY BE RESTRICTED TO 15% OF THE B ALANCE AMOUNT REMAINED WITH THE ASSESSEE AFTER APPLYING FOR CHARI TABLE PURPOSE. 2. THE REVENUE IS OF THE OPINION THAT OUT OF THE GR OSS RECEIPT, THE FIRST THE AMOUNTS ARE TO BE CARVED OUT WHICH ARE ST ATED TO BE APPLIED FOR CHARITABLE PURPOSE. FROM THE REMAINING AMOUNT, THE ASSESSEE SHOULD ACCUMULATE 15%. THIS CONCLUSION OF THE AO HAS NOT BEEN APPROVED BY THE LD.FIRST APPELLATE AUTHORITY. THE LD.FIRST APP ELLATE AUTHORITY PUT ITA NO.2208/AHD/2013 2 RELIANCE UPON THE ORDER OF THE ITAT IN THE CASE OF SAYAJI UBAKHIN MEMORIAL TRUST AND THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF ACIT VS. A.I.N. RAO CHARITABLE TRUST, 129 C TR 205. THE LD.CIT(A) HELD THAT EXEMPTION AVAILABLE UNDER SECTI ON 11(1)(A) I.E. 15% OF THE INCOME IS UNFETTERED AND NOT SUBJECT TO ANY CONDITIONS. 3. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVE, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE LD.COUNSEL FOR T HE ASSESSEE HAS PLACED ON RECORD A COPY OF THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF CIT VS. PROGRAMME FOR COMMUNITY ORGA NISATION, 248 ITR 1 = 166 CR 401 (SC). WE FIND THAT THIS DECISION HA S SILENCED THE CONTROVERSY. IT IS VERY SMALL DECISION. IT READ A S UNDER: 1. THE QUESTIONS THAT WERE REFERRED TO THE HIGH COURT FOR CONSIDERATION, AT THE INSTANCE OF THE REVENUE, READ THUS : I. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND ON AN INTERPRETATION OF THE RELEVANT PROVISIONS OF THE INCOME-TAX ACT, 1961, THE ASSESSE E IS ENTITLED TO EXEMPTION AT 25 PER CENT ON RS. 2,57,376 OR ONLY ON RS. 87,010 ? 2. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, SHOULD NOT THE TRIBUNAL HAVE ACCEPTED THE VIEW OF THE REVENUE EXPRESSED IN THE CIRCULAR, THE SAME BEING CONSISTENT WITH THE RELEVANT PROVISIONS OF THE INCOME-TAX ACT, 1961 ? 3. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, AND ALSO CONSIDERING THE SCOPE OF THE EAR LIER ORDER OF THE COMMISSIONER (APPEALS) DATED 18-11- 1983 THE TRIBUNAL IS RIGHT IN LAW IN HOLDING THAT T HE COMMISSIONER (APPEALS) HAS RIGHTLY INTERFERED WITH THE ORDER OF THE INCOME-TAX OFFICER ?' 2. THE ANSWERS BEING IN FAVOUR OF THE ASSESSEE, THE REVENUE IS IN APPEAL BY SPECIAL LEAVE. 3. THE QUESTION THAT REALLY REQUIRES CONSIDERATION IS WHETHER, FOR THE PURPOSES OF SECTION 11(1)(A) OF THE INCOME-TAX ACT, 1961 ('THE ACT'), THE AMOUNT FOR THE GRANT OF EXEMPTION OF TWENTY-FIVE PER CENT SHOULD BE THE INCOME OF THE TRUST OR IT SH OULD BE ITS TOTAL ITA NO.2208/AHD/2013 3 INCOME DETERMINED FOR THE PURPOSES OF ASSESSMENT TO INCOME-TAX. THIS QUESTION HAS TO BE ANSWERED IN THE LIGHT OF TH ESE FACTS: THE ASSESSEE-TRUST RECEIVED DONATIONS IN THE AGGREGATE SUM OF RS. 2,57,376. IT APPLIED THEREOUT FOR ITS CHARITABLE PU RPOSES THE AGGREGATE SUM OF RS. 1,70,369 LEAVING A BALANCE OF RS. 87,010. THE QUESTION IS WHETHER THE ASSESSEE IS ENTITLED TO ACCUMULATE TWENTY-FIVE PER CENT OF RS. 2,57,376, AS IT CONTEND S, OR TWENTY- FIVE PER CENT OF RS. 87,010, AS THE REVENUE APPEARE D TO CONTEND. SECTION 11(1) (A) READS THUS : '11 INCOME FROM PROPERTY HELD FOR CHARITABLE OR REL IGIOUS PURPOSES.-(1)(A ) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURP OSES IN INDIA; AND WHERE ANY SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF TWENTY-FIVE PER CENT OF THE INCOME FROM S UCH PROPERTY;' 4. HAVING REGARD TO THE PLAIN LANGUAGE OF THE ABOVE PROVISION, IT IS CLEAR THAT A CHARITABLE OR RELIGIOUS TRUST IS ENTIT LED TO ACCUMULATED TWENTY-FIVE PERCENT OF INCOME DERIVED FROM PROPERTY HELD UNDER TRUST. FOR THE PRESENT PURPOSES THE DONATIONS THE A SSESSEE RECEIVED, IN THE SUM OF RS. 2,57,376, WOULD CONSTIT UTE ITS PROPERTY AND IT IS ENTITLED TO ACCUMULATE TWENTY FIVE PER CE NT THEREOUT. IT IS UNCLEAR ON WHAT BASIS THE REVENUE CONTENDED THAT IT WAS ENTITLED TO ACCUMULATE ONLY TWENTY-FIVE PER CENT OF RS. 87,0 10. 5. FOR THE AFORESAID REASONS, THE CIVIL APPEAL IS D ISMISSED. 6. NO ORDER AS TO COSTS. 4. IN VIEW OF THE ABOVE DECISION, WE DO NOT FIND AN Y ERROR IN THE ORDER OF THE CIT(A). THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 29 TH SEPTEMBER, 2015 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 29/09/2015 $% & ''() *$)' / COPY OF THE ORDER FORWARDED TO :